Fifth Street Asset Management (OTCMKTS: FSAM) and Eaton Vance (NYSE:EV) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.
Volatility and Risk
Fifth Street Asset Management has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, Eaton Vance has a beta of 1.9, meaning that its share price is 90% more volatile than the S&P 500.
This table compares Fifth Street Asset Management and Eaton Vance’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fifth Street Asset Management||-20.92%||-626.41%||-2.71%|
This is a summary of current ratings for Fifth Street Asset Management and Eaton Vance, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fifth Street Asset Management||0||0||0||0||N/A|
Eaton Vance has a consensus price target of $51.36, indicating a potential downside of 15.04%. Given Eaton Vance’s higher probable upside, analysts clearly believe Eaton Vance is more favorable than Fifth Street Asset Management.
Earnings & Valuation
This table compares Fifth Street Asset Management and Eaton Vance’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Fifth Street Asset Management||$82.55 million||0.82||-$1.53 million||($0.14)||-9.43|
|Eaton Vance||$1.53 billion||4.67||$282.13 million||$2.42||24.98|
Eaton Vance has higher revenue and earnings than Fifth Street Asset Management. Fifth Street Asset Management is trading at a lower price-to-earnings ratio than Eaton Vance, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
8.6% of Fifth Street Asset Management shares are held by institutional investors. Comparatively, 68.7% of Eaton Vance shares are held by institutional investors. 85.4% of Fifth Street Asset Management shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Fifth Street Asset Management pays an annual dividend of $0.13 per share and has a dividend yield of 9.8%. Eaton Vance pays an annual dividend of $1.24 per share and has a dividend yield of 2.1%. Fifth Street Asset Management pays out -92.9% of its earnings in the form of a dividend. Eaton Vance pays out 51.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Fifth Street Asset Management has increased its dividend for 37 consecutive years. Fifth Street Asset Management is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Eaton Vance beats Fifth Street Asset Management on 12 of the 16 factors compared between the two stocks.
About Fifth Street Asset Management
Fifth Street Asset Management Inc. is an alternative asset manager. The Company provides asset management services to its investment funds (the Fifth Street Funds or the funds), which consist of Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR), both publicly-traded business development companies (together, the BDCs). Its segment provides asset management services to the Fifth Street Funds. The Company conducts all of its operations through its subsidiaries, Fifth Street Management LLC (FSM), Fifth Street CLO Management LLC (CLO Management) and FSCO GP LLC (FSCO GP). The funds, managed by the Company, provide financing solutions to small and mid-sized companies across their capital structures, mainly in connection with investments by private equity sponsors. It provides credit solutions across the capital structure, including one-stop financing, unitranche debt, senior secured debt, mezzanine debt, equity co-investments and venture debt financing.
About Eaton Vance
Eaton Vance Corp. is engaged in the business of managing investment funds and providing investment management and advisory services to high-net-worth individuals and institutions. The Company operates as an investment advisor to funds and separate accounts. The Company, through its subsidiaries and other affiliates, manages active equity, income and alternative strategies across a range of investment styles and asset classes, including the United States and global equities, floating-rate bank loans, municipal bonds, global income, high-yield and investment grade bonds. Through its subsidiary, the Company also manages a range of engineered alpha strategies, including systematic equity, systematic alternatives and managed options strategies. The Company’s open-end fund lineup includes tax-managed equity funds, and non-tax-managed equity and multi-asset funds. The Company’s family of closed-end funds includes municipal bond, domestic and global equity, and bank loan.
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